Sprint and Clearwire want a WiMax network bad enough to enlist financial backing from cable companies, Google and Intel. It may be cable's last stand.
Remember last year when Sprint and Clearwire embarked on a venture that would have defined the WiMax market for decades? That star burned out quickly, with Sprint shedding CEO Gary Forsee
and putting the kibosh on the deal.
Cable giants Comcast and Time Warner Cable want to fund a new company operated by Sprint Nextel and Clearwire to forge a WiMax network, a source familiar with the company's plans told eWEEK March 26.
WiMax provides speedy Internet access on smart phones and other mobile gadgets at a time when people's Web-surfing habits, both for work and play, are becoming increasingly wireless.
Comcast officials declined to comment and eWEEK inquiries seeking comment from Sprint, Clearwire and Time Warner Cable were not returned, but the source confirmed a March 25 report in the Wall Street Journal that Comcast would put as much as $1 billion into the venture, with Time Warner Cable adding $500 million. Cable rival Bright House Networks would contribute between $100 million and $200 million, the source said.
The cable companies would get equity in the business and would be able to purchase wholesale access to the network to offer their own high-speed wireless data and voice services to customers. Specific terms have not been determined.
The source also confirmed that Sprint and Clearwire, which scotched their deal last year
, have also held funding talks with chip maker Intel
Electronista notes that WiMax will be a key selling point
for Intel's Centrino 2 platform.
Meanwhile, Google openly covets a wireless presence and bid unsuccessfully for 700 MHz spectrum
that would have provided a solid platform for its Android mobile operating system.
Cable's Last Stand
Sprint-Clearwire could spend about $5 billion to build out a WiMax network, the source said. Launching a WiMax network makes sense for carrier Sprint, which has been losing customers and cash to rivals Verizon and AT&T in recent years, and Clearwire, which is a WiMax technology provider.
WiMax is also a weapon for cable companies like Comcast and Time Warner, which are threatened by AT&T and Verizon's new pay-TV businesses, part of those phone carriers' strategy to reach millions of customers with landline phone, speedy Web access, mobile phone and video bundles.
Enderle Group analyst Rob Enderle said the pact could be incredibly important to cable companies if they want to hold off AT&T's next big push into their turf and push back.
"For Sprint it is a chance to become relevant again," Enderle said. "For the consumer, regardless of the technology, it will mean ever more affordable and higher-performing wireless networking and communications capabilities."
Rumors of a deal come ahead of next week's CTIA wireless show in Las Vegas, where wireless providers large and small will convene to discuss how to improve wireless access and deliver it to as many people as possible.
Wireless is pervasive in major cities but vendors have been stymied in their attempts to bring wireless technologies and networks to rural areas in a cost-effective way.